Microsoft vs. Meta Platforms: Which Is the Better Magnificent Seven Stock to Buy Right Now?

Microsoft jumped 15% while Meta dropped 9% following their July 29, 2026 earnings reports, as investors rewarded discipline and punished cash burn in AI infrastructure spending.

Microsoft posted 18% revenue growth and 22% EPS growth while keeping capital expenditures at $175 billion—below Wall Street estimates—and maintaining positive cash flow. The software giant demonstrated it can scale AI investments without sacrificing profitability, a balance that drove the post-earnings surge.

Meta's aggressive AI buildout crushed free cash flow, which collapsed from $8.55 billion to $784 million. The company missed EPS consensus and raised capex guidance to $130-145 billion, representing a 90% year-over-year increase. That spending spike without corresponding earnings strength triggered the selloff.

The divergence highlights a growing divide among Magnificent Seven stocks: Microsoft is threading the needle between AI growth and financial discipline, while Meta is betting heavily on infrastructure with deferred returns. Analysts favor Microsoft's balanced approach and stronger earnings trajectory.